Moody’s: Neither debt plan protects the nation’s AAA rating
The “limited magnitude” of both debt plans put forward by congressional leaders would not put the nation’s AAA credit rating back on solid footing, Moody’s Investors Service announced Friday.
“Reductions of the magnitude now being proposed, if adopted, would likely lead Moody’s to adopt a negative outlook on the AAA rating,” the credit rating agency said in a new report. “The chances of a significant improvement in the long-term credit profile of the government coming from deficit reductions of the magnitude proposed in either plan are not high.”
It added that “prolonged debt ceiling deliberations” have increased the odds of a downgrade, but that the firm is still confident policymakers will avoid a default.
“It remains our expectation that the government will continue with timely debt service,” the firm said.
It also clarified that as far as it is concerned, the nation will only default if it misses an interest or principal payment on U.S. debt, not if it misses payments on other obligations like federal employee salaries or Social Security benefits.
Read More at The Hill By Peter Schroeder, The Hill
Boehner, McConnell Agree to Let Obama Borrow Another $2.4 Trillion
House Speaker John Boehner (R.-Ohio) and Senate Minority Leader Mitch McConnell (R.-Ky.) have reportedly agreed to give President Barack Obama the authority to borrow as much as an additional $2.4 trillion—thus allowing him to get past the November 2012 election without having to seek another increase in the legal limit on the federal debt.
A pleased President Obama announced the deal in a briefing at the White House press room at 8:40 p.m. on Sunday.
“Most importantly,” Obama said of the deal, “it will allow us to avoid default and end the crisis that Washington imposed on the rest of America. It ensures also that we will not face this same kind of crisis again in six months, or eight months, or 12 months. And it will begin to lift the cloud of debt and the cloud of uncertainty that hangs over our economy.”
Neither Obama, nor Boehner, nor McConnell released the details of the deal on Sunday evening.
The New York Times reported that the money to increase the debt limit would come in an initial installment of $900 billion followed by a second installment of $1.2 to $1.5 trillion. The first $900 billion would include an immediate $400 billion to allow the government to pay its immediate bills. Both the initial and second installment, according to the Times would be subject of disapproval votes by Congress which would cancel the debt limit increases, but that these disapproval votes would be subject to a veto by President Obama—meaning that both houses of Congress would have to vote by two-thirds majorities to prevent the debt limit increases from happening.
Read More at CNSNews By Terence P. Jeffrey, CNSNews.com
Deconstructing the Revenue Side of the Debt-Ceiling Deal: Yes, There’s a Real Threat of Higher Taxes
Politicians last night announced the framework of a deal to increase the debt limit. In addition to authorizing about $900 billion more red ink right away, it would require immediate budget cuts of more than $900 billion, though “immediate” means over 10 years and “budget cuts” means spending still goes up (but not as fast as previously planned).
But that’s the relatively uncontroversial part. The fighting we’re seeing today revolves around a “super-committee” that’s been created to find $1.5 trillion of additional “deficit reduction” over the next 10 years (based on Washington math, of course).
And much of the squabbling is about whether the super-committee is a vehicle for higher taxes. As with all kiss-your-sister budget deals, both sides can point to something they like.
Here’s what Republicans like:
The super-committee must use the “current law” baseline, which assumes that the 2001 and 2003 tax cuts expire at the end of 2012. But why are GOPers happy about this, considering they want those tax cuts extended? For the simple reason that Democrats on the super-committee therefore can’t use repeal of the “Bush tax cuts for the rich” as a revenue raiser.
Here’s what Democrats like:
There appears to be nothing in the agreement to preclude the super-committee from meeting its $1.5 trillion target with tax revenue. The 2001 and 2003 tax legislation is not an option, but everything else is on the table (notwithstanding GOP claims that it is “impossible for Joint Committee to increase taxes”).
Biden, Democrats liken Tea Partiers to “Terrorists”
By JONATHAN ALLEN & JOHN BRESNAHAN (Politico):
Vice President Joe Biden joined House Democrats in lashing tea party Republicans Monday, accusing them of having “acted like terrorists” in the fight over raising the nation’s debt limit.
Biden was agreeing with a line of argument made by Rep. Mike Doyle (D-Pa.) at a two-hour, closed-door Democratic Caucus meeting.
“We have negotiated with terrorists,” an angry Doyle said, according to sources in the room. “This small group of terrorists have made it impossible to spend any money.”
Biden, driven by his Democratic allies’ misgivings about the debt-limit deal, responded: “They have acted like terrorists,” according to several sources in the room.
Biden’s office declined to comment about what the vice president said inside the closed-door session.
Earlier in the day, Biden told Senate Democrats that Republican leaders have “guns to their heads” in trying to negotiate deals.
The vice president’s hot rhetoric about tea party Republicans underscored the tense moment on Capitol Hill as four party leaders in both chambers work to round up the needed votes in an abbreviated time frame. The bill would raise the debt limit by as much as $2.4 trillion through the end of next year and reduce the deficit by an equal amount over the next decade.
Democrats had no shortage of colorful phrases in wake of the deal.
Rep. Emanuel Cleaver (D-Mo.) called it a “Satan sandwich,” and Rep. Luis Gutierrez (D-Ill.) called seemed to enjoy the heat analogy, saying: “the Tea Partiers and the GOP have made their slash and burn lunacy clear, and while I do not love this compromise, my vote is a hose to stop the burning. The arsonists must be stopped.
Read more at POLITICO HERE.
NASA Satellite Data Guts Global Warming Theories
by James Taylor (Forbes):
NASA satellite data from the years 2000 through 2011 show the Earth’s atmosphere is allowing far more heat to be released into space than alarmist computer models have predicted, reports a new study in the peer-reviewed science journal Remote Sensing. The study indicates far less future global warming will occur than United Nations computer models have predicted, and supports prior studies indicating increases in atmospheric carbon dioxide trap far less heat than alarmists have claimed.
Study co-author Dr. Roy Spencer, a principal research scientist at the University of Alabama in Huntsville and U.S. Science Team Leader for the Advanced Microwave Scanning Radiometer flying on NASA’s Aqua satellite, reports that real-world data from NASA’s Terra satellite contradict multiple assumptions fed into alarmist computer models.
“The satellite observations suggest there is much more energy lost to space during and after warming than the climate models show,” Spencer said in a July 26 University of Alabama press release. “There is a huge discrepancy between the data and the forecasts that is especially big over the oceans.”
In addition to finding that far less heat is being trapped than alarmist computer models have predicted, the NASA satellite data show the atmosphere begins shedding heat into space long before United Nations computer models predicted.
The new findings are extremely important and should dramatically alter the global warming debate.
Scientists on all sides of the global warming debate are in general agreement about how much heat is being directly trapped by human emissions of carbon dioxide (the answer is “not much”). However, the single most important issue in the global warming debate is whether carbon dioxide emissions will indirectly trap far more heat by causing large increases in atmospheric humidity and cirrus clouds. Alarmist computer models assume human carbon dioxide emissions indirectly cause substantial increases in atmospheric humidity and cirrus clouds (each of which are very effective at trapping heat), but real-world data have long shown that carbon dioxide emissions are not causing as much atmospheric humidity and cirrus clouds as the alarmist computer models have predicted.
The new NASA Terra satellite data are consistent with long-term NOAA and NASA data indicating atmospheric humidity and cirrus clouds are not increasing in the manner predicted by alarmist computer models. The Terra satellite data also support data collected by NASA’s ERBS satellite showing far more longwave radiation (and thus, heat) escaped into space between 1985 and 1999 than alarmist computer models had predicted. Together, the NASA ERBS and Terra satellite data show that for 25 years and counting, carbon dioxide emissions have directly and indirectly trapped far less heat than alarmist computer models have predicted.
In short, the central premise of alarmist global warming theory is that carbon dioxide emissions should be directly and indirectly trapping a certain amount of heat in the earth’s atmosphere and preventing it from escaping into space. Real-world measurements, however, show far less heat is being trapped in the earth’s atmosphere than the alarmist computer models predict, and far more heat is escaping into space than the alarmist computer models predict.
Read more at Forbes.com HERE.